Potential privilege pitfalls posed by cloud storage

As the tools of the modern office increasingly operate online, doctors, lawyers and other professionals who serve as the gatekeepers of confidential information are posed with a problem.

As a practical matter, they need to operate in the cloud. Yet if a third party has access to private information, that could eliminate confidentiality, pose a liability risk or even potentially violate the law.

Doctors have already been restricted from storing information online by the Health Insurance Portability and Accountability Act, which imposes requirements that prevent physicians from relying on Google to keep material confidential, absent individual contracts. But a leading 2008 ethics opinion, by the New York State Bar Association gives attorneys more leeway, since it assumes that those providing Internet services are acting as the law firm’s agent, reports the Verge.

However, terms of service are constantly changing, and especially given recent revelations about the reported extent of government review of telephone and email communications, the assumption that material stored online is not subject to review by third parties is open to question. Depending on the facts and circumstances, that could put clients—and their counsel—at risk.

“If you were representing white-collar defendants who do business in Yemen, for instance, maybe it’s best for you just not to use a cloud service at all,” says attorney Jacob Small, an Arlington, Va., practitioner.

Likewise, law professor Sharon Sandeen of Hamline University notes that a privilege waiver could be imposed by overcautious boilerplate terms of service or simply the nature of Internet use. As far as trade secrets, her area of expertise, are concerned, “The mere fact that you’re storing on the cloud, in my opinion, is a strong argument that you’ve waived your trade secrecy,” she says.